beta-Cell death is an important pathogenic component of both type 1 and type 2 diabetes. Recent findings indicate that cell signalling pathways emanating from the endoplasmic reticulum (ER) play an important role in the regulation of beta-cell death during the progression of diabetes. Homeostasis within the ER must be maintained to produce properly folded secretory proteins, such as insulin, in response to the body's need for them. However, the sensitive protein-folding environment in the ER can be perturbed by genetic and environmental factors leading to ER stress. To counteract ER stress, beta-cells activate cell signalling pathways termed the unfolded protein response (UPR). The UPR functions as a binary switch between life and death, regulating both survival and death effectors. The outcome of this switch depends on the nature of the ER stress condition, the regulation of UPR activation and the expression and activation of survival and death components. This review discusses the mechanisms and the components in this switch and highlights the roles of this UPR's balancing act between life and death in beta-cells.